[BETA] Fortnightly

With upward of 50 percent of the utility industry’s workforce approaching retirement, the industry’s leadership, at all levels, must come to grips with this enormous challenge. This looming demographic challenge is not simply a human-resources problem. For most of the industry, it poses a very real threat to the bottom line and touches upon the fundamental ability of the company to pursue its mission. The path to survival will require non-traditional thinking around all the people levers—staffing, work planning, compensation, work processes, performance management, development, job and organization design, and, most important, leadership.

New talent is scarce. And keeping the old talent takes imagination. How are utilities handling changes in personnel markets? We speak with several leading HR consultants to get their views.

Almost 40 percent of utility workers will become eligible for retirement in the next five years. Assuming only nominal growth, the industry by 2010 will need to hire 10,000 new skilled workers each year. Exacerbating this situation is a host of social and market factors that constrain the supply of skilled workers and make the workforce gap especially challenging for electric and gas utilities.

This month’s cover story focuses on how utilities intend to find the talent they’ll need over the next few years to replace all those retiring baby boomers. And part of that puzzle naturally involves executive pay: how to attract the best and brightest without going overboard on rewards for performance.

New developments in IT, outsourcing, customer information systems, and customer relationship management are challenging long held notions about utilities’ essential operations.

Hidden in the 1,700-plus pages of the Energy Policy Act of 2005 is a set of regulatory requirements that will redefine the technology, leadership, training, culture, compensation, job design, and organizational models currently employed in the industry.